Brussels pivots on controversial investment clause in EU telecoms bill

The European Commission has proposed a change to a controversial measure on investment rules in a draft EU telecoms bill. [Andrew Hart/Flickr]

The European Commission has proposed new criteria to guide investment in telecoms networks, in a twist that is likely to stir disagreement as EU negotiators try to strike compromise over a draft telecoms bill.

The Commission circulated a text to EU legislators on Thursday (8 March), which EURACTIV has obtained, suggesting changes to one measure which many lawmakers and telecoms operators consider to be the backbone of the overhaul.

Under the new proposal, national regulators will be able to step back from controlling large telecoms operators if they offer their competitors access to their networks – as long as those agreements between companies create “sustainable competition in the longer term”.

The Commission’s proposal is likely to cause heated disagreement. Big telecoms companies have asked to come under less scrutiny from regulators when they allow competing firms to access their networks. But smaller operators argue that would result in less regulation for giant companies and squeeze out competition.

The EU executive presented its telecoms overhaul in September 2016 as a way to encourage operators to pump more money into updating their networks. Negotiations have been especially fraught as discussions turned to the measure on spurring investment, one of the most controversial aspects of the bill.

The Commission’s original proposal suggested that regulators should only exempt firms from following rules if they agree to invest with competitors in building networks. This week’s change is an attempt to broker compromise with MEPs and national governments.

Member states pushed for allowing regulators to stop controlling companies for up to seven years after they seal investment agreements with competitors. Germany was one of the countries pushing for the rules to allow less regulation of operators that invest.

But MEPs want more safeguards guaranteeing competition between operators before national authorities can relax any rules.

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One source in the European Parliament called the change a “complete departure” from the Commission’s original proposal, which did not offer less regulation of telecoms operators that agree to deals known as commercial access agreements. Those arrangements are negotiated terms for a company to use a competitor’s networks, and are different from decisions to jointly invest in building networks.

“It is hard to imagine how we would negotiate on the basis of this text,” the Parliament source said. Negotiators will discuss the proposal at a meeting on Friday (9 March).

The Commission’s new text also suggests creating an added layer of oversight from Brussels to control national authorities’ decisions on commercial access agreements. The proposal requires regulators to notify the Commission before approving those arrangements, and the EU executive could veto or wave them through within three months.

One diplomat said the new oversight system would be “a bit bureaucratic, but it would bring some certainty” and help to make sure that national regulators apply rules in a similar way.

The broader goal behind the Commission’s proposal to increase investment in telecoms networks is to meet the EU’s plan to have fast internet connections of 100 megabits per second across the bloc by 2025. Schools, hospitals, public authorities and transport hubs should have even faster gigabit-speed connections by that time.

Around €500 billion in investment is needed to update telecoms networks and meet those speed goals, according to the Commission’s prediction.

The draft legislation will only go into effect once a compromise is reached between MEPs, national governments and the Commission. Bulgaria, which is steering negotiations during its presidency of the Council of the EU, wants to wrap up the file by June.

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Spectrum fight soars

Negotiators on the telecoms bill are also facing increased pressure from operators on another controversial measure.

Last week, the Commission celebrated a breakthrough in talks over spectrum. Negotiators agreed that national governments will release spectrum bands by 2020 that are considered crucial for introducing fast 5G mobile networks. EU leaders want 5G to be available everywhere in the bloc by 2025.

The deal also requires member states to guarantee that spectrum licenses will last for at least 15 years, with an option for operators to renew licenses for an extra five years. Currently, spectrum licenses in the EU last an average of around 16 years. Member states have pushed back against the Commission’s proposal for more common rules on how they auction off spectrum.

But telecoms operators say last week’s agreement does not go far enough.

Three lobby groups representing telecoms giants and technology companies are asking lawmakers to guarantee that spectrum licenses will last even longer. The Commission proposal suggested a minimum length of 25 years.

“We are deeply disappointed that the compromise reached last week fails to confront the long-term challenges, falls short of boosting the region’s competitiveness on the global stage and does not establish a credible regulatory path towards 5G in Europe,” read a joint statement on Friday from ETNO, an association representing big telecoms firms, mobile industry group GSMA, and DigitalEurope, whose members include tech firms including Nokia and Google.

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